Toledo, Ohio-based Waterford Bancorp Inc. agreed to acquire Waterford, Mich.-based Clarkston Financial Corp. in a deal valued at roughly $34.8 million.
Each Clarkston Financial common share will be exchanged for either 0.1196 of a Waterford Bancorp common share or at least $10.52 per share in cash. The cash consideration can be increased based on Waterford Bancorp's common share price as of June 30. Clarkston Financial shareholders who own less than 50,000 shares will receive cash, subject to no more than 25% of the aggregate deal consideration being paid in cash, while other shareholders will receive the stock consideration.
Waterford Bank NA will also acquire Clarkston State Bank under the deal. In addition, two Clarkston Financial directors will join Waterford Bancorp's board.
Waterford Bancorp has total assets of $748 million and Clarkston Financial has total assets of $219 million, both as of March 31, according to a press release.
On an aggregate basis, S&P Global Market Intelligence calculates that the deal value is 188.7% of each of common equity and tangible common equity and 14.3x earnings. The deal is 15.88% of assets, 17.80% of deposits and it has a tangible book premium-to-core deposits ratio of 10.88%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between June 5, 2018, and June 5, 2019, averaged 150.80% of book and 154.24% of tangible book and had a median of 19.56x last-12-months earnings, on an aggregate basis, and averaged 156.85% of book, 158.41% of tangible book and had a median of 23.28x last-12-months earnings, on a per-share basis.
Waterford Bancorp will enter Oakland County, Mich. with two branches, which will be ranked no. 19 with a 0.32% share of approximately $56.23 billion in total market deposits.
ProBank Austin served as Waterford Bancorp's financial adviser and Shumaker Loop & Kendrick LLP served as legal counsel. Donnelly Penman & Partners served as the financial adviser of Clarkston Financial, while Varnum LLP served as legal counsel.